RAISES FOR HOSPICE EXECUTIVES ADDED HEAVILY TO ITS EXPENSES

Payroll increased by hundred thousands in past two years

Executives at the San Diego Hospice received increased levels of salary and benefits last year amid growing revenues, but also as warning signs grew regarding an ongoing federal audit of Medicare compliance at the end-of-life charity.

The salary levels may not be unusual in the health care industry, but the increases are raising questions now that the hospice has laid off much of its staff, is selling off its assets and has declared bankruptcy.

Virtually every top official was awarded a raise in the past two years, adding hundreds of thousands of dollars in obligations to the nonprofit.

According to salary data supplied by the hospice, President and CEO Kathleen Pacurar was paid $309,000 in the 2010-11 fiscal year and is now paid $336,591 a year. Records filed in bankruptcy court show she was actually paid more last year — $391,000 total, attributable to a vacation cashout.

Former chief information officer Traci Bruckner had a salary of $203,991 before she resigned in January, 23.6 percent more than two years ago. And interim Chief Financial Officer Erin Graham, who now makes $180,000 a year, was paid $109,242 in 2011.

Pacurar said the most recent salary hikes were approved in July, months before they were forced to whittle down the staff — although amid a federal audit that is the driving force behind current financial uncertainty for the charity.

“We would not have instituted raises during a time period of layoffs,” she said.

U-T Watchdog requested the salary histories last week, after the hospice filed documents in bankruptcy court showing 12 key executives were paid almost $3 million in the year leading up to the Chapter 11 filing. The documents also reveal that the hospice is under investigation by the U.S. attorney’s office, although they do not say why.

The payments disclosed for executives reached as high as $469,125 for a former provost.

The court filings did not show comparable salaries for previous years, which is why the Watchdog requested that data from the charity.

The hospice continued fulfilling its payroll on Feb. 8 and Feb. 22, and sought in bankruptcy court to continue doing so. The United States trustee assigned to the case objected to the payments late last week.

Pacurar is still owed $13,928 on top of the $391,171 she was paid last year, according to the bankruptcy record. She said the money paid to senior staff in the past year includes regular salaries and one-time benefits such as vacation payouts and severance agreements.

The compensation is justified, she said.

“People think you work for a nonprofit for free,” Pacurar said. “As a matter of fact, it’s a $95 million enterprise and the responsibilities are the same as a for-profit business.”

Former rank-and-file workers objected when told of the increased pay by the Watchdog.

“Kathleen repeatedly asked her employees to trade salary for the good of the organization and the community,” said Lawrence Turner, who managed the hospice’s website for three years before being laid off late last year.

Bankruptcy records show hospice revenue was growing before the Chapter 11 filing Feb. 4. Income topped $64 million over the first seven months of this fiscal year, on pace to exceed the $87 million the hospice took in last year, the documents state.